Case History: Retail Exit Strategies

"Pop-Up" Liquidation

Apparel Retailer:
Luna Ladies Boutique @
Selene Ladieswear

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Landlords and creditors managing merchandise that is left behind by a retailer can recover lost rent and generate capital through "Pop-Up" Liquidations and alternative monetization strategies.

Situation

Luna was a contemporary lady’s boutique that grew into multiple locations across the Southeast. Due to the effects that Covid had on the business, the owner of Luna decided to shutter the company and all of its locations, and in lieu of paying back rent, abandon the store inventory to several of their landlords, including at their Buckhead, Atlanta location. Immediately following the finalization of the surrender of the inventory, Fortis Business Advisors was called upon to help monetize the merchandise at the Atlanta location. Because the location had been leased to a new tenant, and the holidays were fast approaching, Fortis had to mobilize quickly to remove the merchandise and prepare a “Pop-Up” location to assist with monetizing the inventory so the landlord could safely close the gap in rent deficiency.

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Objective

From a previous positive experience with Fortis and the former execution of a “Pop-Up” Liquidation, the landlord knew how Fortis worked and what to expect from the effectiveness of the strategy. Fortis’ team packed up the inventory in a day to ensure the original space was cleaned out for the new tenant, then Fortis leased an alternate location, and formally organized Selene Ladieswear. Fortis then took possession of the inventory and transported it to Selene, merchandised the inventory for liquidation, set up the operation from a zero-based budget, and executed a high-impact marketing program effectively driven through a newly developed website specific for Selene and the sale, social and online media, and email marketing. 

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Results         

Recovery driven from a net profit margin of 37.4%

108% Actual Sales to Projected Sales, and due to positive results, the sale extended 6-weeks resulting in General & Administrative expenses scaling at 13% less than original budget

 

Cash flow positive with distributable profit after Week 3 of a 14-week sale

Original landlord recovered multiple months of lost rent